UK Tax Strategy

The Steinhoff UK Group (the “UK Group”) is the group of companies owned directly or indirectly by Steinhoff UK Holdings Limited (including this company), which itself is a subsidiary of Steinhoff International Holdings N.V.. The Steinhoff International group has a Tax Risk Management Framework to align the worldwide group’s approach to tax management and tax risk. The UK Group ensures its compliance with this framework by paying the right amount of tax, in the right place, at the right time.

The UK Group considers this publication meets the requirement of the Finance Act 2016 to publish its UK tax strategy.

Tax Risk ManagementTax considerations impact on all the UK Group’s commercial operations whether these are corporate business taxes based on trade results, VAT and customs duties on the products we buy and sell, employment tax responsibilities when paying staff we employ, or property taxes on the premises from where we make our offering. The UK Group’s in-house tax function plays a role in all aspects commencing with planning and reviewing change proposals to implementation and recording to HMRC through the tax returns and reports.

Within the UK, the UK Board is ultimately responsible for the management of tax risk. The Finance Directors of each subsidiary company or division in turn hold responsibility for tax accounting arrangements within their own businesses, whilst day to day responsibility for the management of the UK group’s tax risk rests with the UK Group Tax Manager. The UK Group Tax Manager has clear reporting channels to all Finance Directors and the divisional and UK Group audit committees, and a tax compliance status report is presented at each quarterly UK Group audit committee meeting, with significant or material matters being reported to the UK Board.

Minimising the tax risk also relies heavily on the accounting systems and controls in the underlying businesses. The UK Board is responsible for implementing and monitoring these systems and controls, with delegation to the Finance Directors of the subsidiary companies and divisions for the day to day management. The internal audit team regularly assesses and tests these controls, and reports to divisional audit committee meetings on a quarterly basis. The businesses in the UK Group are also required to complete and maintain risk registers which are discussed at the quarterly audit committee meetings, and in order to comply with the Criminal Finances Act 2017, businesses are required to have in place controls to specifically guard against tax evasion. External auditors provide an opinion on the UK Group companies’ results on an annual basis, which includes tax amounts and disclosures.

Overall, the UK Group’s appetite for tax risk is low and it structures its affairs based on sound commercial principles.

Tax PlanningAs stated above, tax considerations can have a significant impact on the UK Group’s commercial operations. The UK Group recognises its duty to stakeholders to control unnecessary costs, including taxation, so utilises tax reliefs and allowances that are available. We do not condone either personal or corporate tax evasion under any circumstances.

Efficient tax planning is engaged to support our business and reflect commercial and economic activity. Adherence to relevant tax law is fundamental and the UK Group seeks to minimise the risk of uncertainty or disputes.

For the purposes of UK corporation tax, forecasts are prepared for the UK Group on a quarterly basis in order that an estimate can be made of the annual corporation tax due, and payments on account can be made accordingly. These forecasts inherently contain numerous estimates, particularly surrounding future trading prospects, but are put together with the support of results from all relevant underlying businesses to ensure that the estimate is as accurate as it can be in the circumstances.

Professional opinions are sought from reputable external advisers on matters where the amount of tax involved is significant and the tax treatment uncertain.

Dealings with tax authoritiesA full and active dialogue with tax authorities such as HMRC is maintained, disclosing all relevant facts and circumstances in a timely manner. Where relevant, we will use tax clearances to obtain agreement in advance from tax authorities prior to undertaking transactions.